Question: “Do you think that gold is currently a good investment?”
Alan Greenspan: “Yes. Remember what we’re looking at. Gold is a currency. It is still, by all evidence, a premier currency. No fiat currency, including the dollar, can match it.” Alan Greenspan address to the Council on Foreign Relations, November 2014 CFR meeting; from Gillian Tett, The Financial Times.
Global deflation began in 2007. The result has been increased government spending and declining tax revenues. The worldwide recession is just getting started because money printing and artificially low interest rates are here to stay.
Unprecedented debt bubbles can continue for a very long time. However, exponential debt growth is unsustainable and cannot persist forever. In the next few years, insolvent governments will default, and contagion will lead to a sovereign debt crisis.
BIG MONEY is scrambling to beat the rush out of public debt. This can be seen in extraordinary asset price inflation (luxury real estate, farmland, art, collectibles, etc.). Equity prices have been inflated to unbelievable levels.
Since last October, we have seen a sharp drop in liquidity, violent currency moves, foreign exchange shocks, currency panics, and flash crashes
Gold is a hedge against 15-20% currency moves. Central banks are stock-piling gold bullion, using a purchasing method called dollar-cost-averaging. “Gold remains a big chunk of central bank reserves… China has stock-piled gold as part of a plan to diversify $3.7 trillion in foreign exchange reserves.” Bloomberg, April 20, 2015.
Recent gold purchases by central banks in the Eastern Hemisphere have been eye-popping. Russia recently purchased one million ounces of gold bullion.
Now is the time to diversify into gold and silver. Decide early where you want to put your capital because more capital controls are coming. It will be too late when it is obvious to everyone the train is off the rails. The majority will panic and rush to sell PAPER (derivatives) when they no longer believe governments are in control.
When sellers need liquidity, it will vanish. Buyers for government bonds will disappear. Overnight, most investors will be locked out of positions or locked in positions. Monetary metals will move suddenly as bond liquidity evaporates.
By Denise Rhyne
Call (206) 719-6368
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What is JPMorgan buying while prices are artificially low? GOLD, PLATINUM MINES, and SILVER BULLION. (JPMorgan, 1 Fricker Rd, Illovo, Johannesburg, 2196, South Africa / world’s largest gold producer – Sibanye Gold Ltd)